Creating Markets for Energy Innovations
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DISS. ETH No. 22490 Creating Markets for Energy Innovations Case Studies on Policy Design and Impact A thesis submitted to attain the degree of DOCTOR OF SCIENCES of ETH ZURICH (Dr. sc. ETH Zurich) presented by Jörn Torsten Hünteler Dipl.-Wirt. Ing., RWTH Aachen University M.Sc., Tsinghua University born on 30.09.1984 citizen of Germany accepted on the recommendation of Examiner: Prof. Dr. Volker H. Hoffmann Co-examiner: Prof. Dr. Joanna Lewis Co-examiner: Prof. Dr. Stefano Brusoni Zurich, 2015 Creating Markets for Energy Innovations – Case Studies on Policy Design and Impact Table of Contents ACKNOWLEDGEMENTS ..................................................................................................................................... X ABSTRACT ........................................................................................................................................................ XII ZUSAMMENFASSUNG ....................................................................................................................................... XV SYNOPSIS ................................................................................................................................................... 1 1. INTRODUCTION ........................................................................................................................................ 2 1.1. Mitigating Climate Change: A Mammoth Technological Challenge .............................................. 2 1.2. In Search for a Technological Revolution in the Energy Sector ....................................................... 4 2. POLICY RELEVANCE ................................................................................................................................. 6 2.1. A Growing Role for Government in Energy Innovation .................................................................. 6 2.2. Shifting Priorities: From RD&D to Market Creation ..................................................................... 8 3. RESEARCH DESIGN ................................................................................................................................ 12 3.1. Overarching Research Questions .................................................................................................... 12 3.2. Theoretical Perspective ................................................................................................................... 15 3.3. Contributions to the Literature ....................................................................................................... 18 3.4. Research Framework and Contributions of Individual Papers ....................................................... 19 3.5. Methodology ................................................................................................................................... 22 4. SUMMARY OF THE PAPERS’ FINDINGS ................................................................................................... 22 4.1. Paper 1: How a Product’s Design Hierarchy Shapes the Evolution of Technological Knowledge – Evidence from Wind Turbine Technology .................................................................................................. 23 4.2. Paper 2: Technology Life-Cycles in the Energy Sector – Technological Characteristics and the Role of Deployment for Innovation ............................................................................................................. 24 4.3. Paper 3: The Effect of Local and Global Learning on the Cost of Renewable Energy in Developing Countries .................................................................................................................................. 26 4.4. Paper 4: Compulsive Policy-Making – The Evolution of the German Feed-in Tariff System for Solar Photovoltaic Power ............................................................................................................................. 28 4.5. Paper 5: International Support for Feed-in Tariffs in Developing Countries – A Review and Analysis of Proposed Mechanisms ............................................................................................................... 30 4.6. Paper 6: Japan’s Post-Fukushima Challenge – Implications from the German Experience on Renewable Energy Policy ............................................................................................................................. 32 5. CONCLUSIONS ......................................................................................................................................... 33 5.1. Tailoring Deployment Policies to Specific Energy Technologies ................................................... 34 5.2. Designing Deployment Policies that are Effective in the Long Run .............................................. 38 6. OVERVIEW OF THE PAPERS .................................................................................................................... 40 iii REFERENCES .................................................................................................................................................... 41 PAPER 1: HOW A PRODUCT’S DESIGN HIERARCHY SHAPES THE EVOLUTION OF TECHNOLOGICAL KNOWLEDGE – EVIDENCE FROM PATENT-CITATION NETWORKS IN WIND POWER......................................................................................................................................... 51 1. INTRODUCTION ...................................................................................................................................... 54 2. THEORETICAL PERSPECTIVE ................................................................................................................. 56 2.1. The Sequential Pattern of Innovation in Systemic Artifacts .......................................................... 56 2.2. The Influence of the Design Hierarchy on the Evolution of Artifacts ........................................... 57 2.3. The Influence of the Design Hierarchy on the Evolution of Knowledge ....................................... 59 3. RESEARCH CASE ..................................................................................................................................... 61 3.1. Rationale for Case Selection ........................................................................................................... 61 3.2. Scope of Analysis ............................................................................................................................ 61 3.3. Complex Product Architecture ....................................................................................................... 62 3.4. Stable Service Characteristics .......................................................................................................... 64 3.5. Technological Change along one Trajectory .................................................................................. 64 4. DATA AND METHODOLOGY .................................................................................................................. 66 4.1. Empirical Strategy ........................................................................................................................... 66 4.2. Design Hierarchy ............................................................................................................................ 67 4.3. Patent and Patent Citation Data..................................................................................................... 68 4.4. Patent-Citation Network Analysis .................................................................................................. 70 4.5. Patent-Content Analysis ................................................................................................................. 72 5. RESULTS .................................................................................................................................................. 74 5.1. Design Hierarchy ............................................................................................................................ 74 5.2. Gradual Stabilization of Knowledge Trajectory .............................................................................. 75 5.3. Foundations of Today’s Trajectory of Knowledge Generation ....................................................... 77 5.4. Influence of Network-External Knowledge along Trajectory ......................................................... 79 6. DISCUSSION ............................................................................................................................................. 80 6.1. Creative Sequences in the Evolution of an Industry’s Knowledge Base ......................................... 80 6.2. Implications for Technology Strategy and Public Policy ................................................................ 82 6.3. Interaction of Artifact and Knowledge Dimensions along Technological Trajectories .................. 84 6.4. Limitations and Future Research .................................................................................................... 85 7. CONCLUSION .......................................................................................................................................... 86 ACKNOWLEDGEMENTS ................................................................................................................................... 87 REFERENCES ...................................................................................................................................................